Scandinavian Working Papers in Economics
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The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 258:
International Health Expenditure and GDP: New Multivariate Cointegration Panel Data Results

Ulf-G. Gerdtham () and Mickael Löthgren ()

Abstract: In this paper we test for existence of cointegration between health expenditure and GDP using data from 19 OECD countries for the period 1960-1995. Country-by-country and panel results based on the Johansen multivariate likelihood-based inference and a new panel test for cointegration rank are presented. The empirical modelling is based on a bivariate vector error correction model that allows for trending data as well as an intercept and a trend in the cointegrating relation. Given this model, the main result indicates that a cointegrating relation exists between health expenditure and GDP.

Keywords: Cointegration; Heterogeneous dynamic panels; Maximum likelihood; (follow links to similar papers)

JEL-Codes: C12; C22; C23; I10; (follow links to similar papers)

13 pages, September 21, 1998

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This paper is published as:
Gerdtham, Ulf-G. and Mickael Löthgren, (2002), 'New Panel Results on Cointegration of International Health Expenditure and GDP', Applied Economics, Vol. 34, pages 1679-1686

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